Obama's Small Donors vs. Congress' Big Money?

You can hear editorial boards across the country wringing their hands: Does Sen. Barack Obama's decision to reject public financing for the presidential campaign signal the death of publicly financed elections? Is it possible that Obama, the one who's inspired millions to become involved in politics, is to blame?

The truth is that the public financing system for presidential races has long been outmoded and the blame for the system's failure is at Congress' doorstep, not Obama's. Lawmakers had years to modernize the system while campaign spending has skyrocketed. Congress' resistance makes it clear that it will take a significant effort to get it done.

Others have suggested that the emergence of small donors in the presidential race eliminates the need for public financing, or that it is a form of public financing itself. That's not true either.

First, of the $294 million raised by Obama's campaign through May this year, $137.9 million, or 47 percent, has come in amounts less than $200. That's impressive. But it's a success built on the shoulders of large donations. In the critical first nine months of 2007, Obama relied heavily on larger donations to get his campaign off the ground -- 74 percent of his first $80.3 million was from donations above $200.

More importantly, Obama himself doesn't equate his experience with eliminating the need for public financing. Quite the opposite. Obama wrote in USA Today:

"I wholeheartedly agree with the idea that we need to limit the influence of big donors on campaigns, and I've co-sponsored legislation to fix the system -- legislation Sen. McCain does not support. I am firmly committed to reforming the system as president, so that it's viable in today's campaign climate."

Second, the small donor revolution isn't really taking place anywhere but Sen. Obama's campaign at this time. According to a study by the Campaign Finance Institute, less than 10 percent of the $447 million raised by House candidates through March 31, 2008, came from donations of $200 or less. Just eight percent of incumbents' contributions have come from these small donations. For challengers and candidates in open seats, only 16 percent and 11 percent, respectively, comes in small donations of less than $200. These figures represent the same or a decrease in percentage, not an increase, from previous elections.

There is cause for alarm. Moneyed interests have recognized that change is coming. In early 2009, when a new Congress and president take their oaths of office, major issues like global warming, the health care crisis, a faltering economy, and the war in Iraq will await them. In each area, big moneyed interests had, until recently, placed their bets on the status quo and on Republicans. Now that's changing.

Whoever is elected president will face a Democratic-led Congress increasingly dependent on big donors from vested industries. According to the nonpartisan Center for Responsive Politics:

• Commercial banking interests now give half of their money to Democrats. From 1999 through 2006, big banking interests consistently gave nearly two-thirds of their donations to Republicans in each election cycle.

• From the 2000 to the 2006 elections, Big Pharma gave 70 percent of its donations to Republicans. But now, during this election cycle, they're giving more than half to Democrats.

• The insurance industry gave more than two of every three dollars to Republicans in the first four elections this decade. In 2008 the split is virtually dead even.

This shift is taking place in every major industry with business before Congress. Money is flowing to power. Go right down the line: Electric utility interests used to favor the GOP two-to-one. Now it's fifty-fifty. The defense sector's donations ran nearly 65 to 35 percent for the GOP. Now they favor Democrats by roughly five percent. HMOs have flipped their giving from 60-40 for the GOP to 60-40 for the Democrats. Even the oil and gas industry's donations have shifted by 18 percent toward the Democrats.

In short, big money is preemptively moving to congressional Democrats to blunt a 2009 agenda that addresses health care, global warming, and consumer issues. Since small donors account for so little of the giving to congressional candidates, the only way to blunt this systemic infusion of money long term is to replace it with public funds.

That's why it's critical that voters hold Obama accountable for his commitment to advance public financing legislation if he is elected. If his agenda stands any chance in Washington, he had better engage his army of supporters not only to work for that agenda, or to fix the presidential system. He must fight for congressional public financing as well.

Comments

[FlyingEagel]

Oh really. What a shock to read this. I never knew. Good thing you didn't kill any trees telling all of us something we already knew.

[Dunnage]

Look, I'm going to vote for Obama. But what is broken is Obama's pledge. By the by, how you like his vote for telecoms and spying?

[RebaG]

No pledge was broken. Obama said that he would opt for public financing IF he could come to an agreement about ground rules with the Republican nominee. McCain wouldn't play. And, Obama hasn't voted on the FISA bill. No one in the Senate has. It hasn't come up for a vote yet.

[GhostNyc]

The GOP has had the game rigged for years.

Obama has learned the game and has decided to not to play it. Now McCain & the GOP are crying foul.

I've posted this same question in Huff Po recently and I will post it again..it is in reference to Obama turning down public funds:

Considering your resources & skills and taking into account your opponents resources and skills-

What would you have done?


Obama 2008
Edwards for Attorney General- bring integrity back- charge Bush & Cheney with war crimes.
[

[mh01]

what I said I was going to do, which is take public financing.

I mention this in relation to Obama, but its a problem that all our elected leaders have, including McCain.

They go back on their word in order to win elections and keep themselves in power, or grab a higher office.

[nomobull]

he said if his opponent did he would but mccain didn't until he gad no choice. and his not keeping his word what is your position on that.?

[dexxjones]

public financing per this greedy, overfed government: give us a dollar and and after we waste 99.999% of it on pet projects, helping other countries, supporting our cronies/corporations and making sure we have gas guzzling SUVs, you may have a tiny bit to campaign with

public financing per obama: give us a dollar and we will spend your dollar on our campaign.

obama is proved, by ACTION, that an engaging politician with an actual eye toward representing the people who elect him (and not the lobbyists/corporations) can get financing from actual citizens.

the corporations could never, in their wildest dreams, expect to compete with the citizens themselves. this scares the crap out of everybody and thats a very good thing.

for instance, i am giving as much money as i can to cindy sheehan instead of that craven dlc-slave nancy pelosi.

[Sumocat]

I have never checked that box to give $3 to election financing, and I'm damn proud of it. That I avoided giving upwards of $24 of my household's money toward getting George W. Bush elected is enough to leave me with no regrets. Better to put that money toward my candidate of choice instead.

[RAGGEDSTEP]

David, thank you for pointing out that Obama relies on big money just like other politicians. Sometimes I fear people see this guy as the second coming. I will probably vote for him but I will do so with the knowledge he will return a call from the CEO of Goldman Sachs far sooner than he will return mine.

As for Congress, big money has always bet on powerful winners. The pursuit of monied interests is, at least, one area where our representatives show complete bi-partisanship. I may be a Democrat but I don't think any Republican could have betrayed the public trust any more than Sen. Dodd when it comes to the mortage crisis.

Articles like this should make us hold politicians accountable regardless of their party or wheather they are on the right or left.

[mh01]

But this doesn't fit with Obama's narrative about big money interests....I don't understand? I thought this was a grassroots deal for Obama? Lame.

Just another example of how the facts don't fit the Obama persona that Obama puts forth.

Politics as usual.

[Mrrar]

So a campaign that's publicly financed and has no requirement for voter enthusiasm past the point of which the candidate meets the minimum requirements necessary to be a candidate...

Represents democracy and enthusiasm

Where as a campaign that's propped up by grassroots and netroots funding is an example of a campaign that doesn't need, no, require millions of people involved in it.

Yeah, that makes sense!

I understand your believe that the only fair campaign is one that's publicly financed. It's blatantly, patently wrong. If the Obama and Clinton campaigns had been publicly financed-- if they started with the same amount of money-- Clinton would have won. Obama, who was a better organizer, a better leader, and generated more cash through the enthusiasm he inspired won because there was not such a restriction. What Obama is really doing, and you need to capture this, is that he's REFUSING PAC and National Lobbyist money, and he's also telling 527s that support him to shut the heck down.

THAT is the way the campaign finance SHOULD work. The money should come from the people, not corporate interests.

This is so ridiculous, ugh, you've latched onto the means, and forgotten the ends. We weren't fighting for public financing because we wanted public financing. We fought for it because we thought that it was the only answer, the only way to go. Now we know that there's another path, we just have to make it work!